Babcock Mission Critical Services Australasia Pty Ltd T/A Babcock

[2017] FWC 315

[2017] FWC 315

FAIR WORK COMMISSION

REASONS FOR DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

Babcock Mission Critical Services Australasia Pty Ltd T/A Babcock
(AG2016/5658)

Airline operations
COMMISSIONER HUNT	BRISBANE, 18 JANUARY 2017

Application for approval of the Babcock Mission Critical Services Australasia Aircrew Enterprise Agreement 2016.

[1] On 1 December 2016, I issued a decision [[2016] FWCA 8655] to approve the Babcock Mission Critical Services Australasia Aircrew Enterprise Agreement 2016 (the Agreement) and indicated that I would provide separate reasons for that decision. The reasons are as follows.

Background

[2] The application was filed on 12 September 2016 by Babcock Mission Critical Services Australasia Pty Ltd (the Employer). It was initially allocated to the Agreements Triage Team of the Fair Work Commission (the Commission), and subsequently to Commissioner Lee. The Commissioner identified and communicated with the Employer various issues with the Agreement. On 13 October 2016 undertakings were provided by the Employer to address the concerns that were raised by the Commissioner.

[3] On 13 September 2016, the Commission received a Form F18A - statutory declaration filed on behalf of Mr Stephen Ford. The F18A declared, inter alia, that Mr Ford was a bargaining representative pursuant to s.176(1)(c) of the Fair Work Act 2009 (the Act), that he did not support approval of the Agreement and his reasons for objecting to the approval.

[4] Mr Ford is employed by the Employer as a touring aircrew employee pursuant to the Agreement and performs work at Horn Island located in the Torres Strait.

[5] The Employer opposed the F18A filed by Mr Ford on the basis that Mr Ford was not a bargaining representative for the Agreement. The Employer submitted that during bargaining for the Agreement, Mr Ford had appointed another employee as his bargaining representative pursuant to s.176(1) of the Act. Mr Ford did not give a copy of the purported written instrument of appointment pursuant to s.178(2)(a) dated 12 September 2016 to the Employer until after the Agreement had been made by a majority of employees on 31 August 2016.

[6] The matter consequently was allocated to me, and on 15 November 2016 a telephone conference conducted. On 16 November 2016 the Employer provided a further undertaking to address the issues that were raised at conference.

[7] On 22 November 2016, Mr Ford advised that he and two other touring employees continued to press their objections to the approval of the Agreement.

The Hearing

[8] The matter was listed for hearing and I advised the parties that the purpose of the hearing was to consider the views and objections of Mr Ford in relation to the application and the undertakings provided by the Employer.

[9] I considered it necessary to take into consideration the objections and views of Mr Ford as an employee covered by the Agreement. Mr Ford contended that touring employees, as opposed to fixed base employees who are not touring employees, had relevant considerations that should be taken into consideration. As a consequence the parties agreed that it was not necessary for the Commission to determine whether Mr Ford was properly appointed as a bargaining representative, and his views as an employee should be given relevant weight in the Commission’s determination to approve the Agreement or not.

[10] The matter was heard on 30 November 2016 and the Employer was granted leave to be represented by Mr Chris Ridings of EMA Consulting Pty Ltd. Mr Ford was granted leave to be represented by Mr Alex Raeburn of Counsel. Mr Ben Darlington and Mr Sam Fielder attended the hearing as employee bargaining representatives in support of the approval of the Agreement.

[11] After learning that the Agreement provided for substantial payments in excess of the Aircraft Cabin Crew Award 2010 (the Award), Mr Ford’s objections and concerns with the approval of the Agreement were narrowed to one issue.

[12] It was Mr Ford contention that the Agreement did not pass the better off over all test (BOOT) as a consequence of the standby provisions contained within the Agreement.

[13] It was submitted for Mr Ford that the Agreement, together with the undertakings, did not provide certainty for touring employees with respect to their hours of work. The concern raised suggests the possibility that touring employees may be required to be on standby for periods of in excess of 24 hours while they are on tour and that they face the prospect of there being no ‘downtime’ whilst touring.

[14] Mr Ford gave evidence that he and other touring employees worked on a swing roster of 15 days on and 15 days off. Mr Ford acknowledged that part of the 15 days he is rostered on includes travel time to and from the island.

[15] Mr Ford’s evidence was that touring employees are regularly required to remain on standby for the entire duration of their swing. Mr Ford’s objections with the standby provision relate primarily to non-monetary benefits associated with being wholly released from work whilst not on duty. Mr Ford’s evidence is that as a result of being required to be on standby for the duration of his swing at the island, he is limited in his ability to enjoy rest and recreational activities, including bushwalks, bike rides, and the ability to consume a small amount of alcohol when not rostered for duty.

[16] Mr Ford agreed that during downtime he can do things such as go for a bike ride or a run, however he is concerned that if there is some distance between himself and the base, he might not be in a position to promptly report for work if recalled . He agreed that he is able to travel to nearby Thursday Island, but again, he holds a concern that he may get ‘caught out’ if recalled and not be able to return at very short notice.

[17] Mr Ford conceded that the monetary benefits provided for in the Agreement sufficiently remunerate employees that are directed to be on standby for the duration of the 15 day swing, in comparison to the Award.

Consideration

[18] Section 186 of the Act sets out the general requirements that the Commission must consider to approve an enterprise agreement, and states:

‘186 When the FWC must approve an enterprise agreement—general requirements

Requirements relating to the safety net etc.

(2) The FWC must be satisfied that:

…

(d) the agreement passes the better off overall test.’

[19] The BOOT is provided for in s.193 of the Act, which states:

‘193 Passing the better off overall test

When a non-greenfields agreement passes the better off overall test

(1) An enterprise agreement that is not a greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each award covered employee, and each prospective award covered employee, for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.

FWC must disregard individual flexibility arrangement

(2) If, under the flexibility term in the relevant modern award, an individual flexibility arrangement has been agreed to by an award covered employee and his or her employer, the FWC must disregard the individual flexibility arrangement for the purposes of determining whether the agreement passes the better off overall test.

When a greenfields agreement passes the better off overall test

(3) A greenfields agreement passes the better off overall test under this section if the FWC is satisfied, as at the test time, that each prospective award covered employee for the agreement would be better off overall if the agreement applied to the employee than if the relevant modern award applied to the employee.

Award covered employee

(4) An award covered employee for an enterprise agreement is an employee who:

(a) is covered by the agreement; and

(b) at the test time, is covered by a modern award (the relevant modern award) that:

(i) is in operation; and

(ii) covers the employee in relation to the work that he or she is to perform under the agreement; and

(iii) covers his or her employer.

Prospective award covered employee

(5) A prospective award covered employee for an enterprise agreement is a person who, if he or she were an employee at the test time of an employer covered by the agreement:

(a) would be covered by the agreement; and

(b) would be covered by a modern award (the relevant modern award) that:

(i) is in operation; and

(ii) would cover the person in relation to the work that he or she would perform under the agreement; and

(iii) covers the employer.

Test time

(6) The test time is the time the application for approval of the agreement by the FWC was made under section 185.

FWC may assume employee better off overall in certain circumstances

(7) For the purposes of determining whether an enterprise agreement passes the better off overall test, if a class of employees to which a particular employee belongs would be better off if the agreement applied to that class than if the relevant modern award applied to that class, the FWC is entitled to assume, in the absence of evidence to the contrary, that the employee would be better off overall if the agreement applied to the employee.’

[20] In NTEU v UNSW 1, Lawler VP observed that the BOOT involves balancing an overall assessment of the terms and conditions of an agreement:

‘It is trite to observe that awards typically contain both monetary and non-monetary terms and conditions. Obviously enough, the BOOT calls for an overall assessment. Comparing monetary terms and conditions is, at the end of the day, a matter of arithmetic. There is an obvious problem of comparing apples with oranges when it comes to including changes to non-monetary terms and conditions into the “overall” assessment that is required by the BOOT. In such circumstances the Tribunal must simply do its best and make what amounts to an impressionistic assessment, albeit by taking into account any evidence about the significance to particular classes of employees covered by the Agreement of changes to particular non-monetary terms that render them less beneficial than the equivalent non-monetary term in an award. In my view, it may also be relevant to consider the terms of any existing agreement and whether there is a relevant change of position when compared to that existing agreement.’

[21] In Hart v Coles Supermarkets Australia Pty Ltd and Bi-Lo Pty Limited 2, the Full Bench summarised the prior authorities with respect to undertaking the BOOT:

‘The determination of this appeal requires us to consider, on all of the evidence before the Commission, whether the Agreement passes the BOOT. Section 193(1) of the Act provides that an enterprise agreement passes the BOOT if the Commission is satisfied, at the test time, that each award covered employee, and each prospective award covered employee would be better off if the agreement covered the employee than if the relevant modern award covered the employee. In this case the relevant modern award is the General Retail Industry Award 2010 (the Award). It is well established that the test requires the identification of terms which are more beneficial for an employee, terms which are less beneficial for an employee, and an overall assessment of whether an employee would be better off under the agreement.’

Consideration

[22] The relevant Award for the purposes of the BOOT, as declared by the Employer, is the Aircraft Cabin Crew Award 2010. The Agreement, in comparison to the Award contains conditions which are considerably more beneficial to each employee. In particular, the rates of pay provided for in the Agreement for each classification of employee are substantially more beneficial.

[23] I have taken into consideration the views of Mr Ford with respect to the standby provisions. After undertaking an overall assessment of the Agreement’s monetary and non-monetary benefits in comparison those provided for in the Award, it is abundantly clear that each employee would be better off under the Agreement than under the Award.

[24] I have also taken into consideration the fact that if Mr Ford were covered by the Award he could similarly be directed to remain on standby (reserve duty) whilst on duty at the island. Schedule B of the Award relevantly sets out the conditions of employees for Domestic flying, and with respect to reserve duty, states:

‘B.9.1 Any period in a roster that is not assigned as a duty period, rest period, or rostered day off may be assigned as a reserve duty either at roster build or during the roster period.

B.9.2 A reserve duty may be at an airport, home or other location.

B.9.3 If employees are on reserve duty (other than an airport stand-by) employees must be contactable and ready to perform duties within 90 minutes of contact. This time limit may be extended in particular circumstances and employees will be advised of any such extensions.’ (emphasis added)

[25] Employees who perform reserve duty under the Award are credited with hours towards their roster period hourly total, but the hours are not included in any duty period limitation for the purposes of clause B.5.1. 3 It was not contested that that the rates of pay in the Agreement sufficiently cover the provisions provided for in the Award in that regard.

[26] Both the Agreement and Award are underpinned by a safety net in accordance with Civil and Aviation Safety Authority (CASA) regulations. CASA regulations provide an obligation on the Employer to implement a Fatigue Risk Management System (FRMS) which limits the amount of actual work that can be performed by an employee (not including periods of standby). The FRMS and any changes that are made to it, requires CASA approval.

[27] The undertakings provided by the Employer on 16 November 2016 provide that a touring employee will be rostered in each 24 hour period a shift of up to 12 hours, and will be free of all duties outside of these shifts, but may be required to remain on standby in the case of an unplanned response flight. Further, a touring employee will be released from all duties and standby requirements for at least 10 consecutive hours if continuously working for 14 hours or more (excluding periods of standby away from the base).

[28] It was not contested that the conditions in the Agreement relating to hours of work and standby provisions were a departure from those conditions provided for in the previous agreement that applied to the Employer. I note that with the undertakings provided by the Employer, the Agreement in fact provides more certainty for touring employees with respect to their hours of work.

[29] I have taken into consideration the finding that the Agreement provides for substantially more generous financial and other benefits than those provided in the Award. I have also found that even under the Award, touring employees may be required to remain on standby on the same or at least very similar terms.

[30] The benefits provided under the Agreement, and in particular the substantially greater rates of pay provide a sufficient offset to remedy any detriment caused as a result of being required to be on continuous standby whilst rostered on duty. I have also taken into consideration that touring employees may be required to work and be on standby (if required) whilst working on Horn Island for a period of 15 days, after which they then have a further 15 days off work in which they are not on standby or required to perform any work.

[31] On the information available to the Commission, Horn Island covers a relatively small geographical area. I am satisfied that if a touring employee engaged in recreational activities while on standby, including travel to nearby islands, it would not take an enormous amount of time for the touring employee to return to base as directed. I expect the Employer would understand a touring employee’s best endeavours to return to base by the safest and most economical method if contacted by the Employer.

[32] I appreciate the consideration to be given to a non-monetary benefit of the full and unencumbered enjoyment of non-rostered work time is a discretionary one. I do not consider that there are arduous limitations on touring employees whilst on standby. Certainly, there is an obligation to be contactable by telephone, and to return in the event of an unplanned response flight. A touring employee must not be unduly affected by alcohol for all of the 15 days while on the island. If this is a restriction on touring employees, I consider it is not an unreasonable restriction, and is countered by the 15 day period where the touring employee returns home and is at leisure.

[33] Whilst I am sympathetic to Mr Ford and have considered his evidence that he is unable to properly rest and ‘switch off’ as a result of being required to be on continuous standby whilst on duty on the island, it is the nature of the work the Employer performs at the island. Even if past agreements have provided for a similar standby regime, the earlier arrangements may be given consideration in the analysis of the BOOT in this application, but it is not strictly necessary to do so. The BOOT is undertaken at the ‘test time’ against the Award.

[34] Even if there is no regard for the past arrangements and their similarity to the arrangements in this Agreement, I would approve the Agreement as I consider that there is not a substantial limitation on the freedom of touring employees whilst on standby as reflected in the above paragraphs. If one does have regard to the past arrangements, it is clear that there has not been any substantial change to the standby arrangements, and this would weigh in favour of approving the Agreement.

[35]
Taking into consideration the requirements for approval to which I am directed to by the Act, and all of the evidence and submissions before the Commission, I am satisfied that the Agreement meets the requisite pre-approval requirements and passes the BOOT.

COMMISSIONER

 1   [2010] FWAA 9588 at [96].

 2   [2016] FWCB 2887 at [6] citing AKN Pty Ltd t/a Aitkin Crane Services [2015] FWCFB 1833; Armacell Australia Pty Ltd and others [2010] FWAFB 9985; National Tertiary Education Union v University of New South Wales[2011] FWAFB 5163; Solar Systems Pty Ltd [2012] FWAFB 6397.

 3   See Clause B.9.5 of the Award.

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